You can’t get blood from a stone. The ratings agencies were wrong. Their screwups (fraud?) certainly affected my investment decisions - for the worse I might add. But there’s nothing to be had from them. Short of proven fraud, CalPERS is wasting time and money.
Talk about losers attempting to mask their own incompetence.
The notion that the ratings agencies are to blame for this mess is laughable. Only a complete idiot would have made the investments CalPERS has made, irrespective what the ratings agencies said.
Calpers is nothing if not a whiner. I’d be really surprised to learn that the rating agencies never published some kind of disclaimer.
But of course, they’ll never find fault with the real designers of this catastrophe — Congress and it’s oversight of Fannie/Freddie. (No money in it.)
But looking back won't get the money back. Looking towards the future, the suit might serve to deter such behavior in the future.
I read about the rating services role in the financial crisis last Fall as things began to break into the news. Had been wondering why things were so quiet on this front for so long. Of course, their entire net worth wouldn’t make up a fraction of 1% of what has been lost in asset value.
But if they were closing their eyes to reality, or even accepting payment for good ratings (as some have claimed), they should pay a stiff price as they totally failed in the function they claimed to provide.
Rating agencies should carry insurance in case they are wrong. The better their assessments, the lower the cost. The market then finds an equilibrium between oversight costs and pooled risk mitigation. We don't need the SEC.